The biggest determining factors, in my mind, are what city would you be happiest in and how much money do you have to put towards your upfront costs.

What are your determining factors?

I would dig into more specific comps and look for rent by the room listings in your area to determine more. 

Show me a court case that determined that alone is sufficient.

Definitely work with a CPA as well, since this property had a step up in cost basis when she inherited it they should determine if you need to do a 1031 exchange.

Also I read that on average the interest rate for FHA is lower than the interest rate for conventional but I also read that your credit score helps to determine if you get a low interest rate so is it also possible if you have good credit that you could get the same or better interest rate with conventional?

Your job is to determine what price makes sense to you, and make a fair offer based on that price and terms.Do your own initial analysis, and then have a quality multifamily mortgage broker offer their opinion on what financing terms they can offer to you, and then make your offer based on that valuation.If this is a value add project you need to determine what the units will rent in the market you are in once they are upgraded. 

Regarding the contract... you'll need to obtain the mortgage payoff and should have a title search undertaken on the property to determine what, if any, liens other than the mortgage attached to the property.

Since you posted this in the BRRRR forum this is the formula I use to determine the bottom of my range:75% of ARV - Closing Costs of Refinance - Cost of remodel - Closing Costs of Purchase - Carrying Costs - Buffer for Negotiating + Expected cash flow for 8 monthsI add 8 months of expected cash flow because it makes sense to me to view an individual BRRRR deal through the lens of a 1-year period.

To determine what amount you will need, consult the Bylaws and Declaration of the Association.